New Delhi/Nagpur: The Narendra Modi government has announced a committee to examine the feasibility of having ‘a new financial year’.
It will be headed by former chief economic advisor Shankar Acharya.
The panel will also have former cabinet secretary K M Chandrasekhar, former Tamil Nadu finance secretary P V Rajaraman, and Rajiv Kumar from the Centre for Policy Research.
The current financial year begins on April 1. The panel will “examine the merits and demerits of various dates for the commencement of the financial year, including the existing date,” the finance ministry said.
The report is to come by December 31, and will examine the suitability from the point of view of correct estimation of receipts, and expenditure of central and state governments, the effect of different agricultural crop periods, relation of the financial year to the working season, impact on businesses, taxation system and procedures, statistics and data collection, and the convenience of legislatures for transacting budget work.
It will also check any previous study in this regard and may consult with outside experts and institutions.
If it recommends a change, it will have to work out the modalities, including the appropriate timing of change, a transition period, change in tax laws during that period, amendments required in various statutes, and changes in coverage of the Finance Commission recommendations.
When Prime Minister Narendra Modi directed the government’s senior-most bureaucrats to present innovative ideas as part of a ‘Transforming India’ initiative in January, one suggestion was to advance the date of presentation of the Union Budget to December 31, from the last day of February.
It was neither approved nor rejected. However, no suggestion was made on the change of the financial year.